Small But Consistent Profits

President’s Trump’s announcement that he is pushing back the deadline for further tariffs on Chinese goods has lent support to an already buoyant US stock market.

The US stock market has been on an upward march since late December of last year, the DJIA climbing recently back above the 26,000 to reach its highest level in over three months. Nor has this bullishness been confined to the US. The German DAX has also been staging a recovery so far in 2019, and now stands at its highest since early December 2018.

Another factor stoking risk appetite has been a flurry of M&A activity, with news that General Electric is selling its biopharma division to Danaher for $21 billion and that Barrick Gold, fresh from its merger with Randgold Resources, has launched a hostile bid for Newmont Mining.

The Barrick Gold merger activity comes amids something of a resurgence in the price of gold, which has bounced more than 10% since November of last year, and gold is a key concern for FSBGold, the trader who is the focus of our attention this week.

This is how their trading metrics look like at the summary level:

We can see that they have only just started to trade with real money, but despite this, they do have a reasonably substantial track record with virtual funds, going back around a year. Over the course of that time they have demonstrated a consistency of profits that is encouraging. This has also been done with relatively low levels of risk, judging by their modest risk score and tiny volatility percentage.

This is how those trades split up according to a monthly breakdown:

Nothing but green on display there!

While this year’s profit has been modest in the extreme, a gain of over 8% posted for 2018 is no small feat. We can see that the monthly returns are for the most part slim, but consistency is the key here and it all adds up.

So have they been using a diversified portfolio to achieve this? In a word, no. This is how their asset allocation looks:

It’s a simple case of putting all their eggs in one basket. This offers no diversification of risk, of course, but the counter argument is that there can be advantages in focussing on what you know best.

There is one big question mark hanging over this account, though, and that is how will they perform now that they have switched to trading with real money? The only real answer is to wait and see. If they are able to maintain a similar performance over the next few months, this could be an interesting slow-and-steady type of trader to have in one’s portfolio of accounts.